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Corporate Governance

We are working on continuously improving our systems and their operation to strengthen and enhance a viable corporate governance.

Our basic approach to corporate governance and
our corporate governance system (as of June 19,2020)

Under the Nippon Shokubai Group's Mission of "TechnoAmenity - Providing affluence and comfort to people and society, with our unique technology" - our goals are to develop as an innovative chemical company that provides new value for people's lives, to earn greater trust from the public as a responsible chemical company, and to become a company that all can take pride in, including all our stakeholders. In this way we will increase our corporate value and achieve sustainable growth. We consider viable corporate governance to be essential and have adopted initiatives toward that end. We ensure the rights and equality of our shareholders and maintain an open dialogue, collaborate with various stakeholders as appropriate, disclose information as appropriate and ensure transparency, ensure that the roles of Board Meeting and management teams relate to the appropriate execution of duties, ensure appropriate supervision of the execution of these duties and strengthen and enhance our internal control systems.

Roles and Functions of Various Bodies and Committees

Board Meeting
Comprising eight Members of the Board, including three Outside Members of the Board, Board Meeting supervises the business operations of each Member of the Board through reports, deliberations, and resolutions regarding important matters. In general, meetings are convened monthly under the chairmanship of a Member of the Board selected from members who are not executive officers by a resolution of the Board Meeting. Four Statutory Corporate Auditors, including two External Statutory Corporate Auditors, also attend to give advice and state their opinions when necessary.
Corporate Managing Committee
Comprising the President and executive officers appointed by the President, this committee generally convenes twice monthly (with all executive officers in attendance at one of these meetings) to deliberate on items related to the implementation of basic policies and important management issues. Among proposals discussed by the Corporate Managing Committee, important issues are forwarded to Board Meeting for consideration.
Auditors Meeting
Comprising four Statutory Corporate Auditors, including two External Statutory Corporate Auditors, this meeting usually convenes monthly, submits reports and engages in discussions and deliberations on important matters related to audits.
Nominating and Compensation Committee
An advisory body to the Board Meeting, this is a voluntary organization comprising three or more Members of the Board (including a majority of Outside Members of the Board). It advises on the election/dismissal of the President and Representative Member of the Board, as well as draft nominations of candidates for Members of the Board and Statutory Corporate Auditor positions and on compensation and bonuses for Members of the Board.
Internal Control Committee
Under the chairmanship of the President, this committee has established a system to ensure the reliability of financial reporting as enforced by the Financial Instruments and Exchange Act. It also seeks to process company operations more efficiently and effectively.
Compliance Committee
Chaired by the President, this committee is responsible for deciding company-wide policies as well as medium- to long-term and annual action plans to further enhance our corporate ethics and compliance, with the aim of increasing comprehensive awareness of corporate ethics.
Responsible Care (RC) Promotion Committee
Chaired by the President, this committee promotes the company's Responsible Care initiatives. It formulates the RC Promotion Basic Plan and focuses on further improving safety and quality while addressing environmental issues.
Risk Management Committee
Chaired by the President, this committee serves as the risk management organ in normal times and discusses issues related to risk management and their countermeasures.
Social Contribution Promotion Committee
Chaired by the President, this committee promotes social contribution initiatives by focusing on further strengthening the company-wide social contribution policy and by formulating annual, medium-term, and long-term activity plans.
Disclosure Committee
To contribute to management transparency and fulfill our social responsibilities while ensuring that all stakeholders have a better understanding of our company, this committee supports our efforts to disclose information on our company and Group companies fairly and appropriately and in a timely manner.
TechnoAmenity Promotion Council
We promote CSR activities based on our belief that promoting CSR activities is implementing the Group Mission “TechnoAmenity−Providing affluence and comfort to people and society, with our unique technology.” It is responsible for surveys and examinations on various issues related to our CSR, planning various CSR-related committee meetings, and compiling the progress of activities.

Evaluation of the effectiveness of the Board Meeting

Method of evaluating the effectiveness of the Board Meeting in fiscal 2019

Based on the results of a questionnaire distributed to all Members of the Board and Statutory Corporate Auditors, an opinion exchange meeting was held between all Members of the Board (independent external) and the President and Representative Member of the Board, and evaluations and analyses of the results were implemented. Based on these, the evaluation of the effectiveness of the Board Meeting was summarized at a Board Meeting.

Evaluation result

The Board Meeting was properly functioning in all aspects of its structure, operation, deliberation and reporting, supervising the execution of duties, and supporting system, and it confirmed the effectiveness of Board Meeting. It also confirmed that the measures formulated in response to the points that required improvement identified in the evaluation of the previous year as "better explanations of the important strategies and issues of our Group companies, business environment and strategies of new business, and dialogue with shareholders and investors "have been well implemented.

Initiatives planned for the future

With a view to further increasing the effectiveness of Board Meeting, we will make continuous efforts in response to the results of the evaluation, which showed the required improvements of continuous and more deeper explanations and discussions about the important strategies and issues of our Group companies,and our existing and new business, and collaborations with our stakeholders such as shareholders and investors as well as customers and employees.

Outline of the executive remuneration system

Policy for determining remuneration for Members of the Board and Statutory Corporate Auditors

The remuneration, etc. for internal Members of the Board of Nippon Shokubai consists of basic remuneration and bonuses. Basic remuneration consists of a fixed remuneration portion and a performance-linked remuneration portion. The index used for performance-linked remuneration is “ROA (ratio of profit before tax to total assets).” Bonuses are resolved and determined at the General Meeting of Shareholders each time payment is made, taking into account the profits for the relevant fiscal year and other circumstances. Outside Members of the Board and Statutory Corporate Auditors receive only a basic remuneration (in principle, fixed remuneration) because remuneration linked to earnings is not appropriate for these individuals who oversee business operations from an independent standpoint.